The shrimp Palaemonetes argentinus Nobili 1901 inhabits freshwater streams, lakes and brackish coastal lagoons in the warm temperate regions of southeastern South America. Larvae and adults tolerate a wide range of salinities, exhibiting a well developed osmoregulatory capacity already from hatching. Nevertheless, effects of salinity on the embryos of P. argentinus have not been studied yet. In the present investigation, freshly layed eggs were removed from ten females and, from the time of extrusion to larval hatching, exposed in vitro to four salinities (1, 15, 25, 32 PSU; all incubated at 20EC). This technique allowed the comparison of salinity effects on embryos of the same brood, excluding maternal effects as potentially confounding sources of variation. Initial egg size and duration of embryonic development under identical conditions varied significantly among broods from different females, but showed no significant relationships with female body size. Development was most successful in eggs incubated at salinities of 1 and 15 PSU, with average hatching rates of 72% and 79%, respectively. In contrast, 20% hatched at 25 PSU, and only three individuals (1.5%) in seawater (32 PSU). Egg mortality increased consistently near the end of the developmental period, especially at 25 and 32 PSU. Larvae hatching at these relatively high salinities retained a greater quantity of yolk, while many were deformed, suggesting that hyperosmotic stress interfered with metabolic energy mobilization and morphogenetic processes. The mean time from spawning of the eggs to larval hatching was similar at 1 and 15 PSU (ca. 24 d), but lasted significantly longer at 25 and 32 PSU (2627 d, respectively). During the first ca. 1012 days of embryonic development, the volume of the eggs decreased slightly at 25 and 32 PSU, while an increase was observed at lower salinities (maximum: 20% at 1 PSU). During the final period of development, an increase in egg volume occurred in all treatments, being significantly stronger at low salinities (#15 PSU). The first zoeal stage of P. argentinus can also in complete absence of food successfully develop from hatching through the moult to the zoea-II stage; this trait (facultative lecithotrophy) was not affected by salinity. Our results suggest that successful reproduction of P. argentinus in freshwater and brackish habitats with highly variable conditions of salinity and food availability is based on an early appearance of osmoregulatory functions during the embryonic phase and/or a low permeability for ions of the egg membrane, while yolk reserves persisting from the egg allow for food-independent development through the first larval stage.